Middle East housing sector in doldrums

According to *Tradearabia news report, the Middle East housing sector is now in the doldrums, with Egypt and UAE ranking as two of the three weakest housing markets in the international house price survey conducted by Global Property Guide, a research house.

This is not surprising given the region's ailing economy due to low oil prices. The Middle East's economy grew by just 1.1 per cent in 2017, the weakest growth for eight years, it stated.

According to the survey, Egypt is now the weakest housing market in the global survey, after strong performances in the previous two quarters.

The nationwide real estate index plunged 20.91 per cent during the year to Q3 2018, after y-o-y rises of 4.51 per cent in Q2 2018 and 11.45 per cent in Q1 2018 and annual declines of 11.49 per cent in Q4 2017 and 8.68 per cent in Q3 2017.

House prices dropped 18.53 per cent q-o-q during the latest quarter.

According to Global Property Guide, the house prices across the globe rose in 25 out of the 45 world's housing markets which have so far published housing statistics, while prices fell in 20 countries.

The more upbeat nominal figures, more familiar to the public, showed house price rises in 38 countries, and declines in 7 countries.

However, more than half of the surveyed housing markets showed weaker momentum during the year to Q3 2018 compared to the previous year, suggesting that the boom may be moderating, it stated.

Most of Europe and Asia continue to experience strong price rises. There have also been notable positive turnarounds in Singapore, Mexico, Thailand, and Greece. But China, Sweden, Turkey and most of the Middle East have experienced either house price falls - or a sharp deceleration of house price rises, said the survey.

The strongest housing markets in Global Property Guide's house price survey during the year to Q3 included: Malta (+12.86 per cent), Hong Kong (+11.11 per cent), Netherlands (+8.45 per cent), Singapore (+7.93 per cent), and Ireland (+7.21 per cent), using inflation-adjusted figures.

The biggest y-o-y house-price declines were in Egypt (-20.91 per cent), Turkey (-11.27 per cent), Dubai, UAE (-8.73 per cent), Kiev, Ukraine (-6.27 per cent), and Shanghai, China (-4.49 per cent), again using inflation-adjusted figures.

Global Property Guide pointed out that the other Middle Eastern housing markets were also depressed.

Owing to pressure, Egypt has taken some vital steps to boost the market. President Abdel Fattah El Sisi recently removed the last restrictions on foreign ownership of land and property in Egypt, in an effort to buoy the housing market.

He also allowed the government, the biggest landowner in Egypt, to use its land for public-private partnership schemes. The economy is expected to grow strongly by 5.3 per cent this year, the fastest pace in a decade, according to the IMF.

In Dubai, residential property prices fell by 8.73 per cent during the year to Q3 2018, worse than last year’s 2.84% decline, amidst weak economic growth, low investor sentiment, and an oversupply of housing.

During the latest quarter, house prices in Dubai dropped 2.15 per cent q-o-q, it stated.

Likewise, Qatar’s housing market continues to struggle, amidst a sharp economic slowdown and the adverse impact of the diplomatic crisis.

The nationwide real estate price index dropped 3.67 per cent during the year to Q3 2018, after last year’s 3.47 per cent y-o-y decline. However, property prices rose by 5.25 per cent q-o-q during the latest quarter.